Stop slide into credit card debt abyss

Now come the days when going to the mailbox brings little but dread, the days when the bill comes due for the excesses of the holiday season.

Unfortunately for many Americans, their new bills will only exacerbate a serious credit card debt that is growing nationally because of the slowing economy, a weak job market in the Midwest, South and parts of the West, and the subprime mortgage house of cards that recently collapsed. Credit card holders have been walking the ledge of a debt abyss for some time now and they are beginning to have trouble clinging to it.

"Debt eventually leaks into other areas, whether it starts with the mortgage and goes to the credit card, or vice versa," said Cliff Tan, a credit risk expert and visiting scholar at Stanford University. "We're starting to see leaks now."

The value of credit card accounts at least 30 days in arrears jumped 26 percent in the last year to $17.3 billion. And during the same period, defaults rose 18 percent to nearly $961 million.

That's a lot of late and unpaid bills. Not surprisingly, economists expect delinquencies and defaults to rise further after the holiday shopping season.

Given the nation's materialistic obsessions, credit card offers that arrive all year long, debt consolidation firms advertising "it isn't your fault," many college kids graduating with a mountain of loans to repay, and ads that suggest using cash stops the world, it's not hard to see how people can slip into the debt abyss.

In the end, though, a credit card transaction is a contract. You buy, they deliver, you pay. No matter what the ads might say and no matter the poor financial habits of so many these days, if you buy without being able to pay, it is your fault. And your obligation to pay.

Luckily, however, tomorrow represents a new year, and today is the perfect time to decide that turning over a new financial leaf is in order.

Put those credit cards on ice. Make a plan to pay off current bills and then follow it. Don't break out the cards again until you are certain you can limit your spending to what you can afford.

In other words, meet your past obligations and in the future, don't spend money you don't have.

Seems simple enough, but for many it is not.

"The desires of consumers to want, want, want, spend, spend, spend -- it's the fabric of our nation," said Howard Dvorkin of Consolidated Credit Counseling Service in Fort Lauderdale. Indeed, economic leaders and presidents count on it. But they don't have to pay the bill.

"You always have to pay the piper," Dvorkin said. "And that can be a very painful process."

Something to keep in mind before you break out those credit cards once more.